Correlation Between Grupo Financiero and Ayala
Can any of the company-specific risk be diversified away by investing in both Grupo Financiero and Ayala at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Grupo Financiero and Ayala into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Financiero Inbursa and Ayala, you can compare the effects of market volatilities on Grupo Financiero and Ayala and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Grupo Financiero with a short position of Ayala. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Financiero and Ayala.
Diversification Opportunities for Grupo Financiero and Ayala
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Grupo and Ayala is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Financiero Inbursa and Ayala in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ayala and Grupo Financiero is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Grupo Financiero Inbursa are associated (or correlated) with Ayala. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ayala has no effect on the direction of Grupo Financiero i.e., Grupo Financiero and Ayala go up and down completely randomly.
Pair Corralation between Grupo Financiero and Ayala
Assuming the 90 days horizon Grupo Financiero is expected to generate 1.01 times less return on investment than Ayala. But when comparing it to its historical volatility, Grupo Financiero Inbursa is 1.08 times less risky than Ayala. It trades about 0.23 of its potential returns per unit of risk. Ayala is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,005 in Ayala on September 12, 2024 and sell it today you would earn a total of 130.00 from holding Ayala or generate 12.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Grupo Financiero Inbursa vs. Ayala
Performance |
| Timeline |
| Grupo Financiero Inbursa |
| Ayala |
Grupo Financiero and Ayala Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Financiero and Ayala
The main advantage of trading using opposite Grupo Financiero and Ayala positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Financiero position performs unexpectedly, Ayala can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Ayala will offset losses from the drop in Ayala's long position.| Grupo Financiero vs. National Bank of | Grupo Financiero vs. Absa Group Limited | Grupo Financiero vs. Aozora Bank Ltd | Grupo Financiero vs. Andover Bancorp |
| Ayala vs. Arca Continental SAB | Ayala vs. Becle SA de | Ayala vs. Aquagold International | Ayala vs. Morningstar Unconstrained Allocation |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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